BA BANK A K AND D BO BONDHO DHOLDE DER D DAY 25 OCTOBER 2016 - PowerPoint PPT Presentation

BA BANK A K AND D BO BONDHO DHOLDE DER D DAY 25 OCTOBER 2016

Agenda Ti Time To Topic Spea eaker ker 11.15 Welcome and update on operational performance David Sleath, CEO Financial performance Justin Read, Group Finance Director Financing update Octavia Peter, Head of Tax and Treasury Introduction to Slough Trading Estate Gareth Osborn, Business Unit Director for Thames Valley and National Logistics Q&A and Tour details 12.30 Lunch 13.00 Tour of the Slough Trading Estate including customer visits 14.30 Depart for London via Slough Station 2

Slough Trading Estate SEGRO portfolio by geography (£5.9bn at share) Slough Trading Estate in figures (30 June 2016) Floor space (sq ft) 5.7 million Rest of Europe 6% No. of customers 350 Valuation (completed assets) £1,086 million Poland 7% Yields Net initial 4.9% • France True equivalent 6.0% • 8% London Rents 39% Germany Passing £55.9m • 10% Contracted (topped-up) £61.4m • ERV £66.5m • UK Logistics & Land and development Thames Valley Slough 11% Area 7 hectares • Trading Estate Value (at share) £35m • 19% Vacancy rate (by ERV) 6.0% WAULT (to earlier of break or expiry) 8 years 3

 Opportunity to catch up with/meet some of the wider SEGRO team Harry Stok Stokes Olive liver W Whit ite Pau aul L l Lewis wis Gare reth O Osborn rn Head of Investor Relations & Finance Director, Regional Director, Business Unit Director, Research Thames Valley & UK Thames Valley Thames Valley & UK Logistics Logistics Ellie llie Dale Dale Jere Je remy my Y Yeung Thur hurai Investor Relations Se Sean D Doh oherty ty Tax & Treasury Sit itham ambar arnat athan an Coordinator & PA to Tax Manager Accountant Reporting Manager Justin Read and Phil Redding 4

BANK AND BONDHOLDER DAY STRO RONG NG O OPERA RATING NG PERFO RFORM RMANC NCE DAVID SLEATH

Well placed to outperform  Market backdrop remains favourable  Structural drivers of occupier demand  Low availability, constraints in new supply  SEGRO well placed to capitalise on opportunities  Development  Asset management  Prudent financial management  Near-term growth underpinned by committed developments  Largely de-risked through pre-lets  Significant potential to add further projects 6

Strategic priorities remain unchanged Leased Asset M Mana nage gement nt Dev evel elopmen ent Record low vacancy rate of 4.8% 14 projects completed: £10m • • potential rent, 83% leased 4.1% like-for-like net rental • income growth Leasing of speculative projects • ahead of appraisals Innova Park, Enfield 3.9% uplift from rent reviews and • Acquired renewals 10 pre-let agreements signed in • the period Acqui quisitions ns Disposals Dis als £383m of disposals completed in Lower priority given asset pricing • • Coslada, Madrid the period £14.5m spent on urban Bath Road offices £325m • • Sold SELP transfers €97m 1 warehouses in Continental Europe • Other non-strategic £20m • £44m spent on land and £49m • on land options 1 At 100% Gatwick International Distribution Centre 7

…leading to strong operating and capital performance in H1 Capital value growth of £108m Net rental income growth of £4.3m H1 2016 portfolio realised and unrealised valuation movement, £ millions H1 2016 accounting net rental income, £ millions 20 120 1.9% 0.4% 14.2% 8.8 100 15 (15.9) 80 5.5 1.1% 10 60 (6.7)% 40 3.8 5 20 0 0 Held throughout Acquisitions Development Total portfolio Asset disposals net rental income developments Like-for-like Acquisitions Completed Disposals NAV pe per s sha hare up 2. up 2.6% 6% t to 475p 475p Adj djus usted d EPS up 6. up 6.5% 5% to 9. 9.8p 8p 8

Taking advantage of development opportunities Compl pleted de d developm pment nts Cur urrent nt pi pipe peline ne ( (c6-8 m 8 mont nths hs) Near-term pi Ne pipe peline ne ( (12 12-18 m 18 mont nths hs) Beam Reach 5, East London 12 Liverpool Road, STE – spec, now let as data centre Navigation Park, Enfield £82m of capital invested £210m invested; £125m cost to £228m of potential capex • • • complete £10m of potential rent, 83% £24m of rent • • secured £26.5m rent, 67% pre-let • 63% of rent associated with pre-lets • Fully-let yield of 7.9% 7.9% yield on cost signed or in advanced discussion • • 9

Further development opportunities Current land bank (30 June 2016) Fut utur ure pi pipe peline ne o on n cur urrent nt land b nd bank nk ( (1-5 ye year ars) • SEGRO-owned land bank • £900m potential capex (excl land) • £100m potential rent Land unde nd under opt ption ( n (1-10 y 10 years) • SEGRO control • £850m potential capex (incl land) • £70m potential rent 10

Substantial opportunity to grow rental income £170m from medium/long-term opportunities Annualised gross cash passing rent 1 , £ millions 70 2 100 2 £93.4m from near-term opportunities 24.3 26.5 369.8 9.8 2.1 30.7 319.0 276.4 30 Jun 16 Rent in Reversion to 2015/16 Potential Rent from Near-term Potential Land bank Land held rent-free ERV speculative (completed current pipeline (total) under option developments properties) pipeline still to let (67% let) 1 Including JVs at share; excludes rental value of vacant properties of £17.5m 2 Estimated. Excludes rent from development projects identified for sale on completion 11

Further progress in Q3  Stro rong l lettings s pro rogre ress ss  £13.5m new rent contracted (+27% vs Q3 2015)  Heal althy hy de deve velopm pment nt pi pipe peline ne  553,400 sq m approved or under construction  £29m of gross rent potential, 76% pre-let  7.8% yield on development cost  Discipl pline ned c d capi apital al manage anagement nt  £43m net investment in development and acquisitions  New equity raised to fund development pipeline  Unsecured bond and RCF in SELP to reduce funding costs and improve efficiency 12

BANK AND BONDHOLDER DAY H1 2016 H1 2016 RESULTS JUSTIN READ

H1 2016 Financial Summary Adjusted EPS, +6. 6.5% 5%  Good earnings momentum 9.8p Like-for-like net rental – Healthy like-for-like net rental income growth +4. 4.1% 1% income growth – Strong contribution from development Vacancy rate – Offsets loss of income from disposals 4. 4.8% 8% (FY 2015: 4.8%)  2.6% increase in NAV 475p 475p EPRA NAV per share – Capital value growth from asset management Capital value actions, developments and UK ERV growth +1. 1.9% 9% growth – Stable yields  Strong financial structure Loan to Value ratio 36% 36% (FY 2015: 38%) – Net divestment during the period 14

4.1% growth in like-for-like net rental income £2.3m £120.9m £3.8m £0.2m £116.6m £5.5m £8.8m £(0.4)m JVs at share £(15.9)m JVs at £31.2m Group: up: +4. 4.1% 1% share UK: +6.2% £32.3m CE: –1.0% c£7m from Mainly 2015 Bath Road acquisitions Group Group £85.4m £88.6m H1 2015 Disposals Acquisitions Completed Space taken Like-for-like Surrender Currency H1 2016 developments back for net rental premiums translation development income & other 15

2.6% increase in EPRA NAV 3p 14p 10p (4)p 475p 463p (11)p 31 December Adjusted EPS Final Dividend Realised and Exchange rate Other 30 June 2016 2015 unrealised gains 16

Portfolio value change driven by asset management and ERV growth 1 £120m UK UK +1. 1.9% 9% Slough Trading Estate +0.5% Cont ntine nent ntal E Eur urope pe +0. 0.4% 4% £100m Park Royal +4.4% SELP +0.6% Heathrow +1.1% +1.5% SEGRO wholly-owned +0.2% £80m UK big box logistics 2 +1.0% +2.5% £60m £40m +1.1% £20m +1.2% (0.4)% +0.9% £0m (£20m) Greater London Thames Valley & Northern Europe Southern Europe Central Europe Total National Logistics 3. 3.6% 6% 2.1% 2. 1% 0. 0.1% 1% (0.2)% 0.1% 0. 1% ERV gr growth 2. 2.0% 0% UK: 2. 2.9% 9% Cont nt. Eur urope pe: 0 0.0% 1 Percentage change relates to completed properties, including JVs at share. 2 Includes big box warehouses part of the Greater London portfolio 17

Outlook  Optimistic about occupational markets  Structural demand drivers, supply likely to remain constrained  Too early to assess the impact of the EU referendum  Encouraging early signs  Asset values likely to out-perform wider real estate market  Well positioned to take advantage of suitable investment opportunities Fut utur ure earni nings ngs gr growth h unde underpi pinne nned by d by de developm pment nts 18

BANK AND BONDHOLDER DAY FI FINANC NCING NG U UPDATE OCTAVIA PETERS

Financing activity in 2016 £400m £400m January 2016: APP JV facilities refinanced May 2016: Group revolving credit facilities refinanced and €780m 780m increased September 2016: 10% equity placing to fund development £325m £325m pipeline €700m 700m October 2016: Inaugural SELP bond and RCF 20